Revenue

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 21st July 2015.

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Photo of Steve McCabe Steve McCabe Shadow Minister (Education) 11:30 am, 21st July 2015

What estimate he has made of the net change in revenue to the public purse that will arise from tax changes announced in the summer Budget 2015.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

The change in revenue from tax changes announced in the summer Budget is shown in the Budget document. It shows that net receipts increase by between £4 billion and £6.5 billion in each full year of the forecast period. The Government pledged to raise £5 billion per year from tax. The measures announced in the Budget mean that by 2019-20, the Government will have delivered on their targets, raising £5 billion from avoidance and tax planning, evasion and compliance, and imbalances in the tax system.

Photo of Steve McCabe Steve McCabe Shadow Minister (Education)

Ernst and Young points out that the rise in household taxes is reducing disposable income, with £47.2 billion of tax rises, including the insurance premium tax and vehicle excise duty. Does the Minister accept that over the course of this Parliament, these tax rises are twice as big as any tax cuts?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

We said at the election that we would raise a further £5 billion in tax, but we have one question from a Labour MP complaining about the deficit being too high, we have Labour voting against any measures to control spending, and now we have Labour complaining about any tax increases. So where do they stand? We failed to find coherence from the Labour party in the last Parliament and there is no sign of it in this Parliament.

Photo of Peter Bone Peter Bone Conservative, Wellingborough

Over this Parliament, the UK will pay £27 billion more in EU contributions because the EU has failed to cut farm subsidies. Would it not help our revenues if the EU actually kept their word?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

My hon. Friend is of course aware of the historic deal that the Prime Minister achieved in February 2013, when for the first time ever we saw a real-terms cut in the EU budget. That was a significant achievement, and we obviously want to preserve and build on it.

Photo of Phil Boswell Phil Boswell Scottish National Party, Coatbridge, Chryston and Bellshill

The Chancellor has made some noise—indeed, the Minister mentioned this—about closing tax avoidance schemes exploited by private equity and hedge fund managers, specifically the “Mayfair” tax loophole. Can he confirm that he intends to close these loopholes?

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

We achieved a huge amount in the previous Parliament on tax loopholes. In the Budget, the Chancellor set out plans for additional resources for Her Majesty’s Revenue and Customs to raise even more in dealing with tax avoidance and tax evasion. The particular example that the hon. Gentleman mentions relates to the long-standing treatment of the capital gains tax applying to private equity—something that has existed for many years and applied in most other countries. The Budget contained a number of measures that were designed to close loopholes for the private equity and hedge fund industries.